Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 155450 August 6, 2008

REPUBLIC OF THE PHILIPPINES represented by the Regional Executive Director,

Department of Environment and Natural Resources, Regional Office No. 2, petitioners,
vs.
COURT OF APPEALS, HEIRS OF ANTONIO CARAG AND VICTORIA TURINGAN, THE
REGISTER OF DEEDS OF CAGAYAN, and the COURT OF FIRST INSTANCE OF
CAGAYAN,respondents.

DECISION

CARPIO, J.:

The Case

This is a petition for review1 of the 21 May 20012 and 25 September 20023 Resolutions of the
Court of Appeals in CA-G.R. SP No. 47965. The

21 May 2001 Resolution dismissed petitioner Republic of the Philippines’ (petitioner) amended
complaint for reversion, annulment of decree, cancellation and declaration of nullity of titles. The
25 September 2002 Resolution denied petitioner’s motion for reconsideration.

The Facts

On 2 June 1930, the then Court of First Instance of Cagayan (trial court) issued Decree No.
3819284in favor of spouses Antonio Carag and Victoria Turingan (spouses Carag),
predecessors-in-interest of private respondents Heirs of Antonio Carag and Victoria Turingan
(private respondents), covering a parcel of land identified as Lot No. 2472, Cad. 151, containing
an area of 7,047,673 square meters (subject property), situated in Tuguegarao, Cagayan. On
19 July 1938, pursuant to said Decree, the Register of Deeds of Cagayan issued Original
Certificate of Title No. 115855 (OCT No. 11585) in the name of spouses Carag.

On 2 July 1952, OCT No. 11585 was cancelled to discharge the encumbrance expressly stated
in Decree No. 381928. Two transfer certificates of title were issued: Transfer Certificate of Title
No. T-1277,6 issued in the name of the Province of Cagayan, covering Lot 2472-B consisting of
100,000 square meters and Transfer Certificate of Title No. T-1278,7 issued in the name of the
private respondents, covering Lot 2472-A consisting of 6,997,921 square meters.

On 19 May 1994, Bienvenida Taguiam Vda. De Dayag and others filed with the Regional Office
No. 2 of the Department of Environment and Natural Resources (DENR), Tuguegarao,
Cagayan, a letter-petition requesting the DENR to initiate the filing of an action for the
annulment of Decree No. 381928 on the ground that the trial court did not have jurisdiction to
adjudicate a portion of the subject property which was allegedly still classified as timber land at
the time of the issuance of Decree No. 381928.

The Regional Executive Director of the DENR created an investigating team to conduct ground
verification and ocular inspection of the subject property.

The investigating team reported that:

A) The portion of Lot 2472 Cad-151 as shown in the Plan prepared for spouses Carag,
and covered under LC Project 3-L of Tuguegarao, Cagayan, was found to be still within
the timberland area at the time of the issuance of the Decree and O.C.T. of the spouses
Antonio Carag and Victoria Turingan, and the same was only released as alienable and
disposable on February 22, 1982, as certified by USEC Jose G. Solis of the NAMRIA on
27 May 1994.

B) Petitioner Bienvenida Taguiam Vda. De Dayag and others have possessed and
occupied by themselves and thru their predecessors-in-interest the portion of Lot 2472
Cad-151, covered by LC Project 3-L of LC Map 2999, since time immemorial.8

Thus, the investigating team claimed that "a portion of Lot 2472 Cad-151" was "only released as
alienable and disposable on 22 February 1982."

In a Memorandum dated 9 September 1996, the Legal Division of the Land Management
Bureau recommended to the Director of Lands that an action for the cancellation of OCT No.
11585, as well as its derivative titles, be filed with the proper court. The Director of Lands
approved the recommendation.

On 10 June 1998, or 68 years after the issuance of Decree No. 381928, petitioner filed with
the Court of Appeals a complaint for annulment of judgment, cancellation and declaration of
nullity of titles9 on the ground that in 1930 the trial court had no jurisdiction to adjudicate
a portion of the subject property, which portion consists of 2,640,000 square meters (disputed
portion). The disputed portion was allegedly still classified as timber land at the time of issuance
of Decree No. 381928 and, therefore, was not alienable and disposable until 22 February 1982
when the disputed portion was classified as alienable and disposable.

On 19 October 1998, private respondents filed a motion to dismiss.10 Private respondents

alleged that petitioner failed to comply with Rule 47 of the Rules of Court because the real
ground for the complaint was mistake, not lack of jurisdiction, and that petitioner, as a party in
the original proceedings, could have availed of the ordinary remedies of new trial, appeal,
petition for relief or other appropriate remedies but failed to do so. Private respondents added
that petitioner did not attach to the complaint a certified true copy of the decision sought to be
annulled. Private respondents also maintained that the complaint was barred by the doctrines of
res judicata and law of the case and by Section 38 of Act No. 496.11 Private respondents also
stated that not all the heirs of spouses Carag were brought before the Court of Appeals for an
effective resolution of the case. Finally, private respondents claimed that the real party in
interest was not petitioner but a certain Alfonso Bassig, who had an ax to grind against private
respondents.12

On 3 March 1999, petitioner filed an amended complaint for reversion, annulment of decree,
cancellation and declaration of nullity of titles.13
 The Ruling of the Court of Appeals

On 21 May 2001, the Court of Appeals dismissed the complaint because of lack of jurisdiction
over the subject matter of the case. The Court of Appeals declared:

The rule is clear that such judgments, final orders and resolutions in civil actions which
this court may annul are those which the "ordinary remedies of new trial, appeal, petition
for relief or other appropriate remedies are no longer available." The Amended
Complaint contains no such allegations which are jurisdictional neither can such
circumstances be divined from its allegations. Furthermore, such actions for Annulment
may be based only on two (2) grounds: extrinsic fraud and lack of jurisdiction. Neither
ground is alleged in the Amended Complaint which is for Reversion/Annulment of
Decree, Cancellation and Declaration of Nullity of Titles. It merely alleges that around
2,640,000 square meters of timberland area within Lot 2472 Cad. 151, had been
erroneously included in the title of the Spouses Antonio Carag and Victoria Turingan
under Decree No. 381928 and O.C.T. No. 11585 issued on June 2, 1930 and July 19,
1938, respectively; that hence, such adjudication and/or Decree and Title covering a
timberland area is null and void ab initio under the provisions of the 1935, 1973 and
1987 Constitutions.

Finally, it is clear that the issues raised in the Amended Complaint as well as those in the
Motion to dismiss are factual in nature and should be threshed out in the proper trial court in
accordance with Section 101 of the Public Land Act.14 (Citations omitted)

Petitioner filed a motion for reconsideration. In its 25 September 2002 Resolution, the Court of
Appeals denied the motion for reconsideration.

Hence, this petition.

The Issues

Petitioner raises the following issues:

1. Whether the allegations of the complaint clearly stated that the ordinary remedies of
new trial, appeal, petition for relief and other appropriate remedies are no longer
available;

2. Whether the amended complaint clearly alleged the ground of lack of jurisdiction;

3. Whether the Court of Appeals may try the factual issues raised in the amended
complaint and in the motion to dismiss;

4. Whether the then Court of First Instance of Cagayan had jurisdiction to adjudicate a
tract of timberland in favor of respondent spouses Antonio Carag and Victoria Turingan;

5. Whether the fact that the Director of Lands was a party to the original proceedings
changed the nature of the land and granted jurisdiction to the then Court of First
Instance over the land;
 6. Whether the doctrine of res judicata applies in this case; and

7. Whether Section 38 of Act No. 496 is applicable in this case.

The Ruling of the Court

While the Court of Appeals erred in dismissing the complaint on procedural grounds, we will still
deny the petition because the complaint for annulment of decree has no merit.

Petitioner Complied with Rule 47 of the Rules of Court

First, the Court of Appeals ruled that petitioner failed to allege either of the grounds of extrinsic
fraud or lack of jurisdiction in the complaint for annulment of decree.15

We find otherwise. In its complaint and amended complaint, petitioner stated:

11. In view of the fact that in 1930 or in 1938, only the Executive Branch of the
Government had the authority and power to declassify or reclassify land of the public
domain, the Court did not, therefore, have the power and authority to adjudicate in
favor of the spouses Antonio Carag and Victoria Turingan the said tract of
timberland, portion of the Lot 2472 Cad-151, at the time of the issuance of the
Decree and the Original Certificate of Title of the said spouses; and such
adjudication and/or Decree and Title issued covering the timberland area is null and void
ab initio considering the provisions of the 1935, 1973 and 1987 Philippine constitution.

xxxx

15. The issuance of Decree No. 381928 and O.C.T. No. 11585 in the name of spouses
Antonio Carag and Victoria Turingan, and all the derivative titles thereto in the name of
the Heirs and said spouses, specifically with respect to the inclusion thereto of
timberland area, by the then Court of First Instance (now the Regional Trial Court), and
the Register of Deeds of Cagayan is patently illegal and erroneous for the reason that
said Court and/or the Register of Deeds of Cagayan did not have any authority or
jurisdiction to decree or adjudicate the said timberland area of Lot 2472 Cad-151,
consequently, the same are null and void ab initio, and of no force and effect
whatsoever.16 (Emphasis supplied; citations omitted)

Petitioner clearly alleged in the complaint and amended complaint that it was seeking to annul
Decree No. 381928 on the ground of the trial court’s lack of jurisdiction over the subject land,
specifically over the disputed portion, which petitioner maintained was classified as timber land
and was not alienable and disposable.

Second, the Court of Appeals also dismissed the complaint on the ground of petitioner’s failure
to allege that the "ordinary remedies of new trial, appeal, petition for relief or other appropriate
remedies are no longer available."

In Ancheta v. Ancheta,17 we ruled:

 In a case where a petition for annulment of judgment or final order of the RTC filed under
Rule 47 of the Rules of Court is grounded on lack of jurisdiction over the person of the
defendant/respondent or over the nature or subject of the action, the petitioner need not
allege in the petition that the ordinary remedy of new trial or reconsideration of the final
order or judgment or appeal therefrom are no longer available through no fault of her
own. This is so because a judgment rendered or final order issued by the RTC without
jurisdiction is null and void and may be assailed any time either collaterally or in a direct
action or by resisting such judgment or final order in any action or proceeding whenever
it is invoked, unless barred by laches.18

Since petitioner’s complaint is grounded on lack of jurisdiction over the subject of the action,
petitioner need not allege that the ordinary remedies of new trial, appeal, petition for relief or
other appropriate remedies are no longer available through no fault of petitioner.

Third, the Court of Appeals ruled that the issues raised in petitioner’s complaint were factual in
nature and should be threshed out in the proper trial court in accordance with Section 101 of the
Public Land Act.19

Section 6, Rule 47 of the Rules of Court provides:

SEC. 6. Procedure. - The procedure in ordinary civil cases shall be observed. Should a
trial be necessary, the reception of evidence may be referred to a member of the court or
a judge of a Regional Trial Court.

Therefore, the Court of Appeals may try the factual issues raised in the complaint for the
complete and proper determination of the case.

However, instead of remanding the complaint to the Court of Appeals for further proceedings,
we shall decide the case on the merits.

Complaint for Annulment of Decree Has No Merit

Petitioner contends that the trial court had no jurisdiction to adjudicate to spouses Carag the
disputed portion of the subject property. Petitioner claims that the disputed portion was still
classified as timber land, and thus not alienable and disposable, when Decree No. 381928 was
issued in 1930. In effect, petitioner admits that the adjacent 4,407,673 square meters of the
subject property, outside of the disputed portion, were alienable and disposable in 1930.
Petitioner argues that in 1930 or in 1938, only the Executive Branch of the Government, not the
trial courts, had the power to declassify or reclassify lands of the public domain.

Lack of jurisdiction, as a ground for annulment of judgment, refers to either lack of jurisdiction
over the person of the defending party or over the subject matter of the claim.20 Jurisdiction over
the subject matter is conferred by law and is determined by the statute in force at the time of the
filing of the action.21

Under the Spanish regime, all Crown lands were per se alienable. In Aldecoa v. Insular
Government,22 we ruled:

From the language of the foregoing provisions of law, it is deduced that, with the
exception of those comprised within the mineral and timber zone, all lands owned by
 the State or by the sovereign nation are public in character, and per se
alienable and, provided they are not destined to the use of the public in general or
reserved by the Government in accordance with law, they may be acquired by any
private or juridical person x x x23 (Emphasis supplied)

Thus, unless specifically declared as mineral or forest zone, or reserved by the State for some
public purpose in accordance with law, all Crown lands were deemed alienable.

In this case, petitioner has not alleged that the disputed portion had been declared as mineral or
forest zone, or reserved for some public purpose in accordance with law, during the Spanish
regime or thereafter. The land classification maps24 petitioner attached to the complaint also do
not show that in 1930 the disputed portion was part of the forest zone or reserved for some
public purpose. The certification of the National Mapping and Resources Information Authority,
dated 27 May 1994, contained no statement that the disputed portion was declared and
classified as timber land.25

The law prevailing when Decree No. 381928 was issued in 1930 was Act No. 2874,26 which
provides:

SECTION 6. The Governor-General, upon the recommendation of the Secretary of

Agriculture and Natural Resources, shall from time to time classify the lands of the public
domain into -

(a) Alienable or disposable

(b) Timber and

(c) Mineral lands

and may at any time and in a like manner transfer such lands from one class to another,
for the purposes of their government and disposition.

Petitioner has not alleged that the Governor-General had declared the disputed portion of the
subject property timber or mineral land pursuant to Section 6 of Act No. 2874.

It is true that Section 8 of Act No. 2874 opens to disposition only those lands which have been
declared alienable or disposable. Section 8 provides:

SECTION 8. Only those lands shall be declared open to disposition or concession which
have been officially delimited and classified and, when practicable, surveyed, and which
have not been reserved for public or quasi-public uses, not appropriated by the
Government, nor in any manner become private property, nor those on which a
private right authorized and recognized by this Act or any other valid law may be
claimed, or which, having been reserved or appropriated, have ceased to be so.
However, the Governor-General may, for reasons of public interest, declare lands of the
public domain open to disposition before the same have had their boundaries
established or been surveyed, or may, for the same reasons, suspend their concession
or disposition by proclamation duly published or by Act of the Legislature. (Emphasis
supplied)
However, Section 8 provides that lands which are already private lands, as well as lands on
which a private claim may be made under any law, are not covered by the classification
requirement in Section 8 for purposes of disposition. This exclusion in Section 8 recognizes that
during the Spanish regime, Crown lands were per se alienable unless falling under timber or
mineral zones, or otherwise reserved for some public purpose in accordance with law.

Clearly, with respect to lands excluded from the classification requirement in Section 8, trial
courts had jurisdiction to adjudicate these lands to private parties. Petitioner has not alleged that
the disputed portion had not become private property prior to the enactment of Act No. 2874.
Neither has petitioner alleged that the disputed portion was not land on which a private right
may be claimed under any existing law at that time.

In Republic of the Philippines v. Court of Appeals,27 the Republic sought to annul the judgment
of the Court of First Instance (CFI) of Rizal, sitting as a land registration court, because when
the application for land registration was filed in 1927 the land was alleged to be unclassified
forest land. The Republic also alleged that the CFI of Rizal had no jurisdiction to determine
whether the land applied for was forest or agricultural land since the authority to classify lands
was then vested in the Director of Lands as provided in Act Nos. 92628 and 2874. The Court
ruled:

We are inclined to agree with the respondent that it is legally doubtful if the authority of
the Governor General to declare lands as alienable and disposable would apply to lands
that have become private property or lands that have been impressed with a private right
authorized and recognized by Act 2874 or any valid law. By express declaration of
Section 45 (b) of Act 2874 which is quoted above, those who have been in open,
continuous, exclusive and notorious possession and occupation of agricultural lands of
the public domain under a bona fide claim of acquisition of ownership since July 26,
1894 may file an application with the Court of First Instance of the province where the
land is located for confirmation of their claims and these applicants shall be conclusively
presumed to have performed all the conditions essential to a government grant and shall
be entitled to a certificate of title. When the land registration court issued a decision
for the issuance of a decree which was the basis of an original certificate of title to
the land, the court had already made a determination that the land was agricultural
and that the applicant had proven that he was in open and exclusive possession
of the subject land for the prescribed number of years. It was the land registration
court which had the jurisdiction to determine whether the land applied for was
agricultural, forest or timber taking into account the proof or evidence in each
particular case. (Emphasis supplied)

As with this case, when the trial court issued the decision for the issuance of Decree No.
381928 in 1930, the trial court had jurisdiction to determine whether the subject property,
including the disputed portion, applied for was agricultural, timber or mineral land. The trial court
determined that the land was agricultural and that spouses Carag proved that they were entitled
to the decree and a certificate of title. The government, which was a party in the original
proceedings in the trial court as required by law, did not appeal the decision of the trial court
declaring the subject land as agricultural. Since the trial court had jurisdiction over the subject
matter of the action, its decision rendered in 1930, or 78 years ago, is now final and beyond
review.
The finality of the trial court’s decision is further recognized in Section 1, Article XII of the 1935
Constitution which provides:

SECTION 1. All agricultural, timber, and mineral lands of the public domain, waters,
minerals, coal, petroleum, and other mineral oils, all forces of potential energy, and other
natural resources of the Philippines belong to the State, and their disposition,
exploitation, development, or utilization shall be limited to citizens of the Philippines, or
to corporations or associations at least sixty per centum of the capital of which is owned
by such citizens, subject to any existing right, grant, lease, or concession at the
time of the inauguration of the Government established under this
Constitution. (Emphasis supplied)

Thus, even as the 1935 Constitution declared that all agricultural, timber and mineral lands of
the public domain belong to the State, it recognized that these lands were "subject to any
existing right, grant, lease or concession at the time of the inauguration of the
Government established under this Constitution."29 When the Commonwealth Government
was established under the 1935 Constitution, spouses Carag had already an existing right to the
subject land, including the disputed portion, pursuant to Decree No. 381928 issued in 1930 by
the trial court.

WHEREFORE, we DENY the petition. We DISMISS petitioner Republic of the Philippines’

complaint for reversion, annulment of decree, cancellation and declaration of nullity of titles for
lack of merit.

SO ORDERED.